Wednesday, July 16, 2014

There's Something About Tesla

I am like Dylan's Mr. Jones when it comes to some of the strange occurrences revolving around Tesla Motors: I know something's happening, but I don't know what it is.  There was a strange "coincidence" with the twin car crashes involving Tesla cars that occurred on the 4th of July in West Hollywood and Palmdale.  I put the word coincidence in quotation marks for two reasons: 1) I have written previously about car crashes, particularly about exploding cars and the weird "lattice of coincidence" through which they can be viewed and 2) This wasn't the first time this year a Tesla was involved in a car accident in southern California.  Looking for information in the weekend paper, I came across this:

On the Spot: What to do with accidents involving rental cars

July 7, 2014, 7:30 a.m.
Question: On May 16, when we returned to our car parked at the Santa Barbara Amtrak station, a group of people was gathered in the lot. We were approached by a Santa Barbara police officer; someone had run into our car and fled the scene. The officer ran the license plate given to him by the witnesses and learned the car was owned by Hertz. We worked with the local office, and then we were asked to file a claim on May 19, which we did. An adjuster came to our office to view the damage and to complete the claim. All seemed to be in order until we received a letter stating that Hertz was going to cap its liability at $5,000. The damage is going to be closer to $8,000; Hertz said it would not pay the difference. Our car is 6 months old. What can be done?

Vanessa Troyer

Redondo Beach

Answer: This story does have a mostly happy ending but with some unhappy parts.

Besides contacting us, Troyer also contacted the chairman of Hertz Corp. and a Hertz public relations representative. That was June 16. On June 20, I talked with Troyer and listened, incredulously, to her story. At 11:22 a.m. June 23, I emailed the Hertz representative. At 11:38 a.m. June 23, Troyer received an email saying the damage would be covered.

This is undoubtedly coincidental, unless you're of the school of thought that believes that one should take credit even when it isn't due.

Some credit goes to Hertz Corp., which is the umbrella company for Dollar, Thrifty and Hertz (this was actually a rental from Dollar), for reconsidering this case, which has a twist: The driver who hit Troyer's car was visiting from Europe, where he lives.

Oh, and did we mention that the car he hit is a Tesla Model S 85, the much-talked-about electric car that starts at about $80,000 and was Motor Trend's 2013 car of the year?

The complication — other than Tesla's all-aluminum construction — was that the driver voided his insurance contract, said Paula Rivera, a Hertz Corp. spokeswoman.

"This international renter started out doing the right thing because he actually purchased liability and collision protection from us, so that was a good thing," she said, "except for the fact that a hit-and-run, to a degree, [makes it] null and void."

But Hertz reevaluated the seriousness of what voided the contract — the hit-and-run — and although what the driver did was wrong, it wasn't as serious as, say, damage incurred in the commission of a felony. The company decided to cover the cost.

One small hitch remained at press time, Troyer said: "The check came with a remittance that said 'full and final payment.'" The repair shop said the cost may be more than the estimate. "We decided to wait to see what the outcome of the repair shop's quote," she said.


So that's three car crashes involving Teslas, all within the past two months, all taking place in southern California, one involving a rental car, one involving a stolen car.  Strange.  Wait, I just found another one that happened last year:

Head-on collision in Laguna Beach kills 2, closes road

April 02, 2013|By Matt Stevens
A head-on traffic collision in Laguna Beach early Tuesday killed two people and injured another, forcing the closure of Laguna Canyon Road between El Toro Road and State Route 73.
Authorities received calls reporting the accident around 6:40 a.m., according to Laguna Beach Police Sgt. Louise Callus. Emergency personnel found two vehicles involved in the collision and debris scattered across the northbound and southbound lanes of the roadway, a police statement said.

Two adult men inside a "severely damaged" Honda Accord were declared dead at the scene, officials said. The driver of the second vehicle, a Tesla, was transported to a local hospital with minor injuries, Callus said.
Investigators said the Tesla was leaving Laguna Beach and veered into oncoming traffic causing the collision. No additional details were immediately available.
The affected stretch of Laguna Canyon Road will remain "closed through the morning hours," the police statement said.  

Now I really don't know what to make of this weirdness.  Some internet wags are declaring this may be a conspiracy of Teslas seeking out Hondas, though that explanation errs in citing the Palmdale crash involving a Honda when it actually involved a Toyota.  It also doesn't take into account that annoying question central to any good conspiracy theory: cui bono?  Who benefits?  At first glance, it certainly doesn't seem to benefit Tesla Motors.  After the twin crashes on July 4, their stock dropped.  And here's what's really bizarre: almost the exact same thing happened last November - three Tesla crashes, three Tesla batteries catch fire, and Tesla's stock drops.  The only difference between then and now is no geographical closeness to the crashes:

Tesla fire: 3rd Model S crashes, burns. Tesla Motors (TSLA) stock follows suit.

Tesla Motors (TSLA) had avoided major battery complications until this fall, when three Model S cars crashed and their batteries caught fire. Tesla Motors officials are scrambling to assure investors and the public that these Tesla fires are not spontaneous eruptions that have plagued other battery-powered vehicles. 

By , Staff writer

  • View Caption
Three Tesla Motors (TSLA) Model S electric cars have caught fire after crashing in the past five weeks. It's an electric car company's worst public-relations nightmare.

The advanced lithium-ion batteries used in modern electric cars are prone to overheating, and early generations suffered high-profile fiery battery incidents that didn't help electric carmakers make their case to the driving public.

Up until a little over a month ago, Tesla Motors' Model S had avoided major battery complications. But now the Palo Alto, Calif., company has three battery fires on its hands, and is scrambling to assure investors and the public that these fires are isolated incidents resulting from collisions – not the spontaneous eruptions caused by overheating.

"For consumers concerned about fire risk, there should be absolutely zero doubt that it is safer to power a car with a battery than a large tank of highly flammable liquid," Tesla Motors Chief Executive Elon Musk wrote in a blog post after the first fire last month. 

Shares of Tesla stock were down 7 percent to $142.04 in afternoon trading Thursday, after reports of the third Model S fire emerged. That's after sinking 14.5 percent Wednesday, triggering a "circuit breaker" on the Nasdaq exchange after its third-quarter sales didn't meet analysts' expectations. Limited battery supplies hampered sales.

The third fire took place Wednesday near Smyrna, Tenn., after a crash. Tesla has said the fire was caused by an accident and is investigating further.

“We have been in contact with the driver, who was not injured and believes the car saved his life," Liz Jarvis-Sheen. a Tesla spokeswoman, said in an e-mailed statement. "Our team is on its way to Tennessee to learn more about what happened in the accident. We will provide more information when we’re able to do so.”

The previous fires took place in Seattle and Merida, Mexico. No one has been reported seriously injured in any of the incidents. The National Highway Traffic Safety Administration (NHTSA) reviewed the first incident, but found no reason to perform a full investigation at the time.

Tesla cites added protective casing and ventilation around the energy-dense batteries as reason for its superior safety record. The Model S ranked among the safest cars on the road in NHTSA testing.


Yes, things do come in threes, but twice?  In successive years?  Such an anomaly in the "lattice of coincidence" prompts the question: who would want to see Tesla Motors fail?  There's quite a gallery of suspects around that question.  For starters, how about Governor Chris "Traffic Jam" Christie:

A Tesla conspiracy in N.J.? (Editorial)

Tesla Motors' battle to sell electric cars directly to consumers faces a new hurdle as another state, this time Missouri, considers a measure to bar its company-owned store system. Above, a Tesla Motors Model S on display at the company's store at the Short Hills Mall. (Emile Wamsteker/Bloomberg)
Star-Ledger Editorial Board By Star-Ledger Editorial Board
on May 09, 2014 at 7:00 PM, updated May 09, 2014 at 7:05 PM

This is how conspiracy theories get started.Electric cars are so rare that many New Jerseyans have never seen one. Yet already two efforts have arisen in Trenton to hobble the industry.

The first came last year in the form of a bill proposed by state Sen. Jim Whelan (D-Atlantic) that would have slapped a per-mile fee on zero-emission vehicles.

Whelan’s rationale was that the state would lose gas tax revenue as more electric cars joined the fleet. The math says otherwise. Federal regulations require the average fuel economy of all vehicles to rise gradually until 2025, when the average would be 54.5 mpg.

Obviously, the total gas consumed — and the total tax collected on it — will be the same if every car averages exactly 54.5 mpg or some get 25 mpg and others use no gas at all. So a conspiracy theorist might be tempted to think the bill’s Democratic sponsor had some other motive, such as strangling the industry in its infancy.
The same suspicions might apply to the recent actions of our Republican governor. In January, Chris Christie pocketed a $5,500 contribution to his inaugural committee from the state’s powerful auto dealers lobby. In March, the governor’s Motor Vehicle Commission voted to kick the most successful electric-car manufacturer in history, Tesla, out of the state on the grounds that the company had cut out the middle man by selling directly to consumers instead of through dealers.

Never mind that Tesla had just two showrooms in New Jersey and sold only a handful of cars per week. A cynic — or a conspiracy theorist — might note that the dealers wanted to block the sale of electric cars because they don’t require much maintenance. There are no oil changes and no spark-plug changes. There are no emissions adjustments because there are no emissions. Tires and brakes can be changed anywhere. So what’s left for the dealer to do — except push to have them outlawed, of course?

All of this was a big embarrassment to a governor who has positioned himself as a free market champion. Before long, Christie was insisting the MVC was just enforcing the law. He hinted he would sign a bill to change that law.

A couple Democratic assemblymen are now offering him that chance. Lou Greenwald of
Camden County and Tim Eustace of Bergen County are sponsoring a bill that would permit electric-car manufacturers to sell directly to consumers. Greenwald said he expects the bill to sail through both houses. Soon, it could once again be legal to sell Teslas in the most densely populated state, where the car’s 270-mile range makes it practical for any trip imaginable within state boundaries.

Let’s hope there’s a conspiracy to get it signed into law.

Very suspicious.  But to be honest, as big as Chris Christie is (no, that's not a fat joke), he's really a small player in the grand scheme of things, I think.  When it comes to big players, we're talking about the corporate world, car companies, oil companies.  Doesn't exactly narrow down the field of suspects, does it?  So maybe the more prudent approach would be to look at the presumed target: Tesla Motors CEO Elon Musk.  Who is this character?  Let's start by looking at his spin on the most recent events:

Tesla Crash: Model S May Have Had Shields to Prevent Battery Fire

9:17 PM PST 07/05/2014 by Michael Walker

Associated Press

The headline-generating collision in West Hollywood on July 4 involving a stolen Model S sheds light on why no one has yet been killed in a Model S.

It is a measure of Tesla's formidable buzz that a stolen-car story involving no celebrities or deaths — albeit accompanied by July 4-worthy fireworks — makes international news.
The high-speed crash of a Model S early Friday in West Hollywood that split the car in two and may have caused its lithium-ion battery to erupt in flames received coverage in Bloomberg News, the U.K.'s Daily Mail, USA Today, and dozens of other far-flung media outlets. 
A subsequent, deadly crash later the same day involving a Model S that rear-ended a Toyota Corolla in Palmdale, Calif., killing the Toyota's driver and two child passengers, also received extensive coverage. 

Granted, July 4 is a proverbial slow news day, and Tesla's previous difficulties with the Model S's batteries igniting after two of the cars stuck debris drew the attention of the National Highway Traffic Safety Administration.

According to NHTSA statistics, approximately 30,000 fatal crashes and 1.5 million injury crashes occur in the U.S. annually, or about 4,000 per day. And while both July 4 Tesla accidents involved unusual circumstances — a high-speed chase in the first and multiple fatalities in the second — none of the other crashes the same day made a measurable ripple in the national and international media.

After the earlier incidents, Tesla CEO Elon Musk pointed out that the two Model S fires drew disproportionate coverage given that there were 200,000 fires in gasoline-powered cars the same year.

Meanwhile, the fact that the drivers of both Teslas in the July 4 crashes survived — the driver in the Palmdale crash received only minor injuries — is cited as further evidence of the Model S safety. 
In remarks to shareholders in June, Musk boasted that no one had been killed in a Model S despite the cars having been driven a total of 344 million miles. He stated that no one in a Model S crash has sustained "a serious permanent injury — and there have been some crazy crashes," Musk said. "There was one guy who drove through two concrete walls at 110 mph."

Following the battery fires, Tesla reinforced the Model S with three underbody shields made from aluminum and titanium to prevent debris from compromising the battery pack and starting a fire. All Teslas made since March 6 have the shielding; cars manufactured before can be retrofitted free of charge. 

It was unclear whether the Model S that caught fire after the West Hollywood crash had the shields, but it was stolen from a Los Angeles Tesla store and was reported to be a new model.


To be fair, Musk has a responsibility to his stockholders to spin events regarding his company in as positive a light as possible.  But it may be the case that this strange scenario doesn't break down into a neat little story of good guys and bad guys.  Musk has been responsible for other high-profile companies with some strange connections.  In 1999, Musk was instrumental in the early growth of PayPal.  It is through PayPal that Musk is connected with the founder of Ebay, Pierre Omidyar.  Worth $8.5 billion, Omidyar is bankrolling a general news service which will host Glenn Greenwald, the former Guardian journalist who has broken a series of stories on the NSA from documents by whistleblower Edward Snowden.  This seems to be a somewhat paradoxical development, considering that Omidyar, through PayPal, has connections to the NSA.  As James Corbett reported:

More worrying still are Pierre Omidyar’s role in this saga. That this billionaire co-founder of eBay is suddenly so concerned with the state of journalism that he is willing to drop a quarter of a billion dollars purchasing the services of the very man who is sitting on a trove of tens of thousands (or more) NSA documents is odd, especially considering that Omidyar’s record on civil liberties and his network’s connections to the NSA and Booz Allen Hamilton are enough to raise serious red flags about his new venture.

As principal shareholder and chairman of eBay, Omidyar controls eBay’s child company, PayPal. PayPal has recently made headlines for prosecuting the so-called “PayPal 14,” the hacktivists who staged a virtual ‘sit in’ in protest of PayPal’s decision to cut off Wikileaks’ funding by organizing a Denial of Service attack on PayPal’s website. PayPal was co-founded by Max Levchin, a dedicated NSA supporter.

More worrying still, Sal Gambianco, one of the principal investment partners with the Omidyar Network, actually sits on theboard of advisors of Globant, a software company in which both the Omidyar Network and Booz Allen Hamilton, Snowden’s former employer, are major shareholdersPhilip Odeen, one of the Booz Allen Hamilton board members, also sits on the Board of Directors of Globant. The Omidyar Network and Booz Allen Hamilton are also both major investors in Innocentive.

But there is another company Musk founded that might give a better indication of the forces within the Military-Industrial Complex (MIC) that might be seeking a competitive edge against him by any means necessary.  That company is SpaceX.  And the competitors?  That would be entrenched MIC members Boeing and Lockheed-Martin.  This article from the Washington Post highlights a recent dispute between the corporations:

Elon Musk’s SpaceX granted injunction in rocket launch suit against government

SpaceX founder Elon Musk participates in a discussion during the 2014 annual conference of the Export-Import Bank (EXIM) April 25, 2014 in Washington, DC. Musk said SpaceX would file a lawsuit against the U.S. Air Force on shutting out private companies for launching national security related rockets. (Alex Wong/Getty Images)
April 30

A U.S. Court of Federal Claims judge issued an injunction late Wednesday prohibiting a joint venture between Lockheed Martin and Boeing from proceeding with plans to buy Russian-made rocket engines.
Judge Susan G. Braden’s ruling came after SpaceX, a California-based rocket company, sued the federal government Monday, protesting the Air Force’s award of a lucrative space contract, saying it should have been competitively bid.

In the suit, SpaceX criticizes United Launch Alliance (ULA) for using Russian engines in some of its rockets, which SpaceX founder Elon Musk said might be a violation of U.S. sanctions and was unseemly at a time when Russia “is the process of invading Ukraine.”

Musk alleged that the deal would benefit Dmitry Rogozin, the deputy prime minister who heads the Russian defense industry and is named by the U.S. government in the sanctions.

In reaction to the sanctions, Rogozin tweeted: “After analyzing the sanctions against our space industry, I suggest the U.S. delivers its astronauts to the ISS [International Space Station] with a trampoline.”

Braden’s ruling prohibits ULA from making payments to the Russian engine manufacturer.

The contract, for 36 rockets to launch defense payloads, such as satellites, was awarded to ULA — a 50-50 venture of Boeing and Bethesda-based Lockheed — on a sole-source basis in December. By 2030, the Pentagon expects to spend almost $70 billion on the program.

At a news conference last week announcing the suit, Musk, the entrepreneur who co-founded PayPal and Tesla Motors, said SpaceX could provide rockets at considerably lower cost than ULA. Since then, he has gained the support of some members of Congress, including Sen. John McCain (R-Ariz.), who have called for increased competition in the awarding of large multiyear contracts.

“This is not SpaceX protesting and saying these launches should be awarded to us,” Musk said at the news conference. “We’re just saying these launches should be competed. If we compete and lose, that’s fine. But why would they not even compete it? That doesn’t make sense.”

In a statement issued this week, ULA said it is “the only government certified launch provider that meets all of the unique . . . requirements that are critical to supporting our troops and keeping our country safe.”

A rigorous acquisitions process “saved the government and taxpayers approximately $4 billion while keeping our nation’s assured access to deliver critical national security assets safely to space,” the company said.

Note the suspicious timing of events: ULA, the Boeing/Lockheed Martin joint venture, is awarded the contract in December 2013.  This is just one month after the first triple string of Tesla crashes that caused their stock to drop.  Then in April, Musk wins this injunction in his suit against the government.  This is just one month before the first crash in the second triple string of Tesla crashes.  Then four days after the back-to-back 4th of July crashes, with Tesla's stock dropping once again, ULA filed a court order to dismiss SpaceX's lawsuit.

Time will tell who the winner of this case will be.  We've seen previously in the case of Preston Tucker that upstart innovators in the automotive industry don't fare well when taking on corporate behemoths in bed with the government.  I'm not sure if Musk is another Tucker, or a DeLorean, or a completely different animal.  Quite fascinating that Musk would choose to name his car company after the genius electrical engineer Nikola Tesla, who has been the subject of multiple conspiracy theories.  I wonder if Musk really sees himself as standing in his shadow.  Considering his proposed Hyperloop project, I wouldn't doubt it.

So what's really going on?  I can only close the way I opened this post, with a song lyric from the 1960s, this time from Buffalo Springfield's For What It's Worth: "There's something happening here.  But what it is ain't exactly clear."


Tanya Savko said...

If only you and I had been roommates when I had all those English research papers to write. You = Research King.

Robert Paulsen said...

Thanks, Tanya! I've always enjoyed the hunt for info ever since I was on the high school debate team. Ah, if only the internet had been around back then!